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Education: the key to economic wellbeing

A recent study conducted on behalf of DHL shows that relatively high numbers of school dropouts in some Asian countries are impacting economic growth. In this blog post, I want to look at this issue from a slightly wider perspective and talk about how companies can help young people make the transition into the world of work.

Recently during the World Economic Forum in Davos, economic and political leaders discussed about the pros and cons of short-term economic incentives like tax cuts versus long-term measures such as investment in infrastructure and education.

Elsewhere, during the event “Creating a Shared Future through Education and Empowerment” was discussed in detail by a panel including Canadian Prime Minister Justin Trudeau and Malala Yousafzai, the girls education activist, cofounder of the Malala Fund and Nobel Peace Prize laureate.

The foundation stone

Any mention of education at Davos attracted my interest because it seemed to gel with so much of what we’ve been doing at Deutsche Post DHL Group in recent years. Education, after all, is probably the most important factor in a modern economy. It is, I believe, the foundation stone upon which everything else is built. Certainly, research we’ve commissioned here at DHL seems to confirm the enormously important role education plays in economic wellbeing.

Our recent A Way Back to School study, for instance, shows Asia could be losing nearly US $34 billion per year in GDP due to children dropping out of school. This might be costing some countries as much as 2 percent of their GDP and even holding back some of Asia’s fastest-growing economies from reaching their full potential.

Out-of-school rates in all seven countries studied – Bangladesh, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam – rose exponentially as children grew older, with at least one in every three children dropping out of school by upper secondary-age.

Fast growth can’t fix it

The chief reason for this? Economic necessity. It’s sad to say, but poverty often forces children from cash-strapped families to swap school for a wage. For these families, breaking off school is often also necessitated by the relatively high cost staying on in education.

This is a tragedy because while everyone recognizes the social importance of keeping children in school, the personal and economic costs are huge. And rapid economic growth won’t fix the problem either.

A case in point is India. Although its economy is growing at around 7 percent, over 28 percent of its children leave education at secondary level. In Indonesia the story is similar. Although poverty levels have halved since 1999, fast economic growth still hasn’t altered the fact that 1 in 5 students drop out of school by lower secondary age.

Action is needed

If things are to change, I believe we need to take concerted action to reduce the rates of out-of-school children. Otherwise, I fear that the region’s most promising economies may soon face a significant talent shortage that could limit the speed of their future growth and development.

I’m not alone either. The research’s author, Dr Pumsaran Tongliemnak, Policy Analyst, Ministry of Education Thailand, agrees. “History”, he says “has proven that countries can only sustain their economic growth when it translates into greater education and innovation amongst the labor force. Countries which fail to adequately tackle the issue of out-of-school children will either hit a ceiling to their GDP growth, or experience greater instability due to an increasing divide between out-of-school children and those who stay in school.”

Nevertheless, it’s not just about keeping children in school so that they can become enablers to economic growth when they graduate. It’s also about quality of education and providing young people greater opportunities to develop employability and life skills in and around the classroom – something that has, in fact, been clearly defined within the context of the United Nations Sustainable Development Goals. The truth is that once they’ve left school, many young people do in fact struggle to make the transition into the world of work. This also impacts the economy and often entails high personal costs for those involved.

Getting involved

And this is where DHL’s GoTeach program comes in. GoTeach operates in all the seven countries examined in the report. By working in partnership with global non-governmental organization (NGO), Teach for All, GoTeach sets out to deliver a range of educational and vocational opportunities to young people in disadvantaged communities.

In another partnership with SOS Children’s Villages, GoTeach also works hard to foster the empowerment and employability of young people from challenged socio-economic backgrounds. As part of this program, our employees volunteer their time to mentor these youths. By sharing their professional and personal experiences, the volunteers hope to inspire and motivate these young individuals as they prepare their first steps into the work of work.

Partnership activities are clustered around job orientation, soft and basic skills, gaining initial work experience and training and support for starting their own businesses. The program started in four countries in 2011 and now covers almost 30 worldwide.

Reaping the benefits

In 2017 alone, GoTeach educational activities benefited nearly 11,000 children in Bangladesh, India, Malaysia and the Philippines. At the same time, the GoTeach partnership with global NGO SOS Children’s Villages saw DHL employees spend more than 2,000 hours mentoring, training and providing internship opportunities to youths in Indonesia, Thailand and Vietnam.

Through the GoTeach program, DHL also contributes meaningfully to the United Nations’ 2030 Agenda for Sustainable Development and specifically to the Sustainable Development Goals number 4 (quality education) 8 (decent work and economic growth) and 17 (partnerships for the goals).

Partnering for the next generation

Our latest study makes very clear the sheer volume of out-of-school children in Asia, and the rising costs of doing nothing. If we want to tackle this issue in a meaningful way, private-sector corporate social responsibility programs must collaborate far more cohesively with NGOs and governments, investing in measures like parental awareness and special schooling infrastructure with proven effectiveness. We have both a window of opportunity and a responsibility to the next generation of Asia’s young people to do so before it’s too late.

Download study “A Way Back to School”

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